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Carillion Liquidation - What you need to know

Carillion went into liquidation on Monday 15th January 2017 when its directors applied to Court for compulsory liquidation. Liquidation, is the process by which a company is terminated. The court then appointed an Official Receiver. Under the compulsory liquidation legal process, PwC is there to support the Official Receiver in meeting its statutory duties to maximise the recovery of funds in administering the liquidation process.

Check carefully the identity of the contract counterparty. The Carillion companies in liquidation are:

Due to the sheer scale of administering the liquidation process, the Official Receiver and the Government have underwritten the cost of PwC’s expertise and assistance, in administering the liquidation process.

Certain elements of the Carillion group enterprise (mainly the public sector service elements) are being continued by PwC temporarily as part of the winding-up process. The process involves ensuring the company’s assets are realised and the proceeds are distributed to creditors in order of priority. Unsecured creditors will rank at the bottom of the priority list.

The PwC website has been set up to advise the creditors and “to ensure the continuity of public services while securing the best outcome for creditors.”

The statement continues to confirm that all parties “will be paid for the work they do during the liquidation”. Whilst payment for work undertaken by members during the liquidation is considered an expense of the liquidation process and is therefore guaranteed, payment for work undertaken prior to Monday will, in the vast majority of cases, be considered unsecured debt.

Again, due to the scale of the insolvency process and therefore the costs involved in administering it, it is highly unlikely the liquidation will generate sufficient funds to make any payment (a “dividend”) to unsecured creditors. Payments of this nature tend only to be a small proportion of what is owed and even then, not paid for a considerable period of time.

Download our guide to ECA and BESA members for more information on the Carillion situation.

Click here to see a list of Carillion companies in liquidation, and the relevant appointment date for claims.

Note that Carillion (AMBS) Limited is not in liquidation and continues to trade under the control of provisional liquidators. If you are continuing to provide goods and services to this Company, please refer to the ‘Suppliers’ section on the Carillion website.